Business IdeasGold imports may fall to 10-15 tonnes in May
Low demand due to high prices will make a dent in India"s gold imports this month which will be down to 10-15 tonnes, experts have said.
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Gold is ruling over Rs 15,000 per 10 grams in the spot markets. In April 2009, gold imports stood at 20 tonnes.
Imports stood at 29 tonnes in May 2008, according to the data provided by Bombay Bullion Association.
"Gold imports during May will be only about 10-15 tonnes due to slowdown in demand caused by high prices. Unless the prices comes down, the imports will not increase," Bombay Bullion Association Director Suresh Hundia told PTI.
During January-May 2009, gold imports is estimated at about 32-37 tonnes against 115 tonnes in the corresponding period of 2008.
Gold prices were ruling at around Rs 15,100 level per 10 grams in the physical markets yesterday, while in the global markets the metal was trading at $981.50 an ounce (28.34 grams).
On leading commodity exchange MCX, the most active June contract for gold was at Rs 14,900 per 10 grams.
Gold prices are likely to firm up further and meet major resistance at $1,000 level. However, if it breaches the $1,000 an ounce level, the price will accelerate to a new peak, SMC Global"s Rajesh Jain said.
The major reason for the rise in the precious metal is the crashing of dollar index, which is below 80, a near-five month low.
"Crash in dollar increases investment in gold as a hedge against inflation," Jain added.
Global uncertainty, due to nuclear test by North Korea also boosted the prices of the yellow metal, said another analyst.
Rise in crude prices is yet another factor, which is causing the prices to firm up.
"Crude has gone up to $66 a barrel, giving rise to inflation and, hence, boosting gold prices," he added.